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Societe Generale SA GLE

Rating as of

Morningstar’s Analysis

Valuation
Currency in EUR
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

SocGen's Capital Allocation Rating Is Poor

Johann Scholtz, CFA Equity Analyst

Analyst Note

| Johann Scholtz, CFA |

We assess Societe Generale’s capital allocation as Poor. SocGen finds itself in a tricky situation. Its profitability has materially lagged its cost of capital for an extended period now, and reinvesting in its existing operations is likely to lead to the same result. Divestment of some noncore businesses could improve profitability marginally, but SocGen’s core businesses’ profitability is also below par. The logical course of action for a nonfinancial firm under these circumstances would be to return capital to shareholders aggressively. SocGen, however, has one of the weakest balance sheets of the European banks we cover, and it will need to maintain its current level of capitalisation to meet regulatory demands. We maintain our economic moat rating of none and our EUR 25.50 fair value estimate.

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Company Profile

Business Description

Founded in 1884, Societe Generale is one of France's major banks. It was historically viewed as primarily a corporate and investment bank, but it has meaningful retail banking operations in France, Eastern Europe, Russia, and North Africa.

Contact
29, Boulevard Haussmann
Paris, 75009, France
T +33 142142000
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 149,022

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